For the third month in a row, the Indian Pharma Market (IPM), slipped (4.8% y/y) on the high base (that had benefitted from the second lockdown); volumes slipped 7.5% y/y and launches declined 2.2% while price hikes grew 4.9% y/y.

For the first time in ten months, on a MAT basis, the IPM grew 10.1% y/y (vs 12-16% average) as volumes grew a mere 2.8% y/y, price hikes 5.5% y/y and product launches 1.7% y/y.

While derma therapies (7% of the IPM) grew a huge 19%, anti-infectives (11% of the IPM) fell a steep 36.5%. Acute therapy sales fell 13.2% y/y, while chronic therapies grew 3% (47% and 33% of the IPM respectively). In Apr, Merck, Astra Zeneca, Ajanta and Torrent were growth front-runners.

Ajanta, Torrent and Mankind grew by double digits. Despite the 4.8% decline in the IPM, there was good teen growth for Ajanta (19.6%), Torrent (14%) and Mankind (10.6%). Growth for Sun+Ranbaxy and Ipca have been on the lower side. at 5.5% and 6.3% respectively. While most companies’ growth was in negative territory, underperformers were Glenmark (declining 52.4% impacted by Fabiflu sales); Natco and Cipla fell 16-17%. 

Of MNCs, Merck, AstraZeneca consistently outstripping IPM. Similar to domestic peers, MNCs too were weak, except Merck and AstraZeneca, outgrowing the market 25% and 22.6% respectively. Abbott+Novo Nordisk climbed 7.5% while Pfizer, Novartis & Sanofi underperformed, falling 7-17%.

Fewer Covid patients impacted anti-infectives. With the decline in treatment of Covid patients, the extraordinary growth in anti-infectives last year cannot be replicated, resulting in a steep 37% fall. Respiratories and VMN declined 11-13% y/y. On the other hand, more patient footfalls resulted in good growth in dermatology and gynaecology therapies, which grew 19% and 16% respectively y/y. Growth in key therapies like cardiac and pain (21% of the IPM) was muted, while anti-diabetes and GI grew 4-5%. Acute therapy sales fell 13.2% y/y, while chronic therapies grew 3% (47% and 33% of the IPM respectively) and sub-chronic therapies grew 3.5% (21% of the IPM).

According to the brokerage, as the pandemic has receded, the past exceptional growth in acute therapies may not be repeated (stellar double-digit growth for anti-infectives coming down). We believe that chronic-driven companies would have better opportunities to grow as Covid is now past, domestically.

Demand footfalls for dermatology and gynaecology have started to pick up. To ramp up growth via the inorganic route, JB Chemicals (Sanzyme+Azmarda), Eris (JV MJ Biopharm +Oaknet), Dr Reddy’s (Cidmus), Lupin (Anglo-French portfolio) and Aurobindo (Veritaz) have been front runners. We like companies with strong chronic-therapy ranges, and maintain our positive view on Pfizer India, Eris, Torrent and Ajanta.